A First Step
After months of deliberation, the Obama administration issued a proposed gainful employment regulation in an effort to protect students from programs at for-profit colleges that leave them with unmanageable debt and worthless degrees. The proposed rule includes provisions requiring career education programs to meet certain standards related to the debt-to-earnings ratio and default rate of graduates. While I would have liked to see a stronger rule – one that includes, for example, loan repayment rates as a metric and a new program approval process – it is a step forward.
Too often, for-profit colleges get away with using predatory and deceptive tactics to bully our most vulnerable students – including minority, veteran, and low-income students – into “career” programs that fail to make them career-ready. As a teacher of predominantly low-income and minority students for more than 20 years, I know what these students need from postsecondary education. They need access to affordable degree and certificate programs that lead directly to good jobs.
In Congress, I have led multiple efforts to support the administration’s rulemaking process for gainful employment and to educate my colleagues. Unfortunately, I have found that the issue is little understood here on Capitol Hill. And the powerful for-profit lobby is relentless – both in its portrayal of for-profits as victims in this debate and in its campaign contributions.
For-profits like to claim that they are student-centered and dedicated to serving, educating, and preparing underrepresented and underserved populations for the workforce, but the numbers tell a different story. The Department of Education reports that for-profit programs account for just 13 percent of postsecondary students, but nearly half of all student loan defaults. And a little over a quarter of for-profit colleges produce graduates who earn more than high school dropouts. Meanwhile, most for-profits receive between 80-90 percent of their revenues from federal student aid.
Perhaps even more telling than these statistics is the fact that the very organizations dedicated to advocating for and protecting minority, veteran, and low-income populations are skeptical of for-profit programs and support strong gainful employment regulations. These groups include the AFL-CIO, NAACP, League of United Latin American Citizens (LULAC), Iraq and Afghanistan Veterans of America (IAVA), Student Veterans of America, and many others. In fact, at a gainful employment briefing that I organized on the Hill for Members of Congress and their staff, representatives from several of these groups spoke passionately about the harmful effects many of these programs have had on these populations.
Despite massive efforts by the Association of Private Sector Colleges and Universities (APSCU) – the linchpin of the for-profit lobby – I know that there is strong support in the House of Representatives for gainful employment regulations. Last year, I was joined by 34 of my colleagues in sending letters to the Administration in support of a gainful employment regulation. And I know that there is broad public support for cracking down on for-profits. A petition I launched with the organization CREDO in opposition to HR 2637, which would prevent the Department of Education from issuing gainful employment regulations, garnered over 101,000 signatures.
My staff and I have met with for-profit college representatives numerous times. In each of these meetings, we hear the same rhetoric – our programs are doing their job, they are all properly accredited, our graduation and job-placement rates are great. Some of them even tell us that they would support a version of a gainful employment regulation and that bad actors should be penalized.
If that is the case, if their programs are high-quality and meet certain standards, then why wouldn’t they support the administration’s gainful employment regulation? Wouldn’t this rule weed out those bad actors and drive more business to the industry’s super stars? It all seems a bit disingenuous. Especially considering the fact that more than 30 state attorneys general, the Consumer Financial Protection Bureau, the Securities Exchange Commission, Federal Deposit Insurance Corporation, and the Education Department are all involved in investigating the practices of for-profit colleges.
Again, the administration’s proposed rule is a solid move toward protecting our students. I hope that as the rulemaking process continues to move forward, there are opportunities to make the rule even stronger. And to all the students who have suffered as a result of poor career-education programs, I hope you speak up and tell your story.
U.S. Representative Mark Takano is a Democrat who represents California's 41st district.
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